Getting started with Dropshipping in 2020, is it worthwhile?
I understand why people ask this question but the truth is Dropshipping is no different to any other business.
Whether it be real estate or blogging, people move in and out of this world every day and they will continue to do so well into the future.
A lot of people try various online business models and decide to dropout because ‘it hasn’t worked for them’.
People don’t like to hear about the the failures in any business but sometimes the things that don’t go right at first propel you to work even harder and take a different route.
Dropshipping does work and it can work for you as long as you follow the right steps.
There is no better time than now, in 2020 to start with Dropshipping.
This guide is for beginners and I want to help you so read on..
Here’s how to get started..
Dropshipping is an online e-commerce business model where an online store advertises products to sell. Only when the customer purchases from that online store, does the owner of the store then make a purchase from the manufacturer or supplier.
The manufacturer or supplier will then fulfil and ship the product(s) direct to the customer.
The amazing thing about this business model is that you do not hold stock nor do you have to spend time or money shipping the goods out.
You effectively act as the middle man by collecting the profit by marking up the items you sell.
If you put in the work and research there is huge earning potential, with some online stores make well into the hundreds of thousands each month!
Create a website
You need to have an E-commerce website or landing page in order to be able sell products online with Dropshipping.
The most popular E-commerce dropshipping platform is Shopify.
Shopify is an e-commerce platform that lets you manage your dropshipping business. You are able to customize your very own online store whilst selling in multiple marketplaces.
They integrate very well with all of the social media platforms including Facebook, Instagram and Twitter, making marketing easy.
Market your Products
Customers won’t just come across your page, you need to advertise to get them to your site.
This is typically done via Facebook and Instagram, but more people are starting to use other methods such as Google ads, blogging, snapchat.
Manufacturer/Supplier ship the products
The great thing about Dropshipping is that you do not physically touch the inventory.
Once you receive an order, send it to the supplier and they will package and ship the item for you.
The trick here is to find a supplier that has FANTASTIC reviews and faster shipping times.
The most common place to find suppliers is Aliexpress.
My favourite part is the earning potential with Dropshipping.
You don’t have any storage fees, shipping fees etc, so once you work out you profit from facebook ads and product costs & extras the rest is yours.
It is essential you are always answering customer enquiries and complaints.
People find any excuse to leave a bad review and whilst building an online brand this is an absolute no-no.
Relatively low start up costs: Because you don’t have any inventory costs or storage fees the nature of this dropshipping business means the upfront costs don’t need to be sky high. You don’t stock the product, so will not have to pay for it until the customer buys it. However you need to have a decent amount of money to advertise your products on Facebook/Instagram. A good amount for this is approximately $200-400.
- You can literally start today: If you wanted to and had the budget ready, you could set up your store, find a product and advertise it today. It takes a little while to build up enough knowledge to understand business processes and facebook ads, however if you are dedicated there is no reason why you couldn’t be earning serious money in your first month.
Earning Potential: Once you find a great product and it’s selling, the scaling potential is huge. The key to this is pouring your profits back into the business to eventually have a stand alone business that doesn’t rely on a dropshipper. You would source the product in bulk and be able to supply the products to you customer cheaper and quicker!
Rely on other people’s stock: If you find a product and it does really well, the last thing you want is for the supplier to become out of stock. Sometimes this can happen, which is why its even more essential to build a brand and start manufacture on the product as soon as you know it’s working.
The profit margins are low, compared to a few years ago: This market is getting more and more popular daily so naturally you will run into more competition which in turn decreases the profit margins. Buying a product one by one is naturally going to cost you most than buying in bulk.
Lead times out of your control: You don’t have control over the suppliers lead times and shipping times. If a customer contacts you asking when their product will arrive, it will depend on when the drop-shipper ships the product. A way to avoid questions & complaints about shipping times, would be to make everything clear on your website and follow up each order using Email Marketing.
- Your going to get copycats: As soon as your product starts doing well, it’s inevitable that someone else will jump on the same product as you and this can seriously affect your ‘business’. The best workaround for this (as we speak about later), after 1-2 weeks of consistent sales/scaling, is to brand your product, offer bundles and improve shipping times. This is something you can offer that you competitors won’t be able to.
The BEST way to start a Dropshipping store
1. Find ‘winning’ products
Start here with product research with the aim of building a brand.
In the past opening a general store (a store that sells everything) was a common things for most beginners.
Now that we’re in 2020, customers are looking to buy from brands they trust even more, so the old model no longer works.
If you’re a beginner, you want to be able to build a trust with your customer from the start.
Starting an ecommerce store starring only one product or one niche is definitely the way to do this.
Look for products you know are already selling, don’t try and reinvent the wheel (unless you know what you’re doing).
Whether it’s a general store or one product store you choose you can do product research in the following ways:
Product Research Tools
If time is something you just don’t have at the moment, the best option is to get research software to do the work for you.
So far the software tool I have found works best is Ecomhunt.
Ecomhunt allows you to easily find products that are already proven to sell or how they like to call them Winning products!
The great thing about this winning product method is not a lot of people will be trying it unlike the Facebook method below.
They’re currently offering a 30 day FREE trial, so you don’t have anything to lose.
Give the tool a try and find your winning product.
This is the way I found my first product and I still think it works.
However, it’s becoming less effective because of the sheer volume of people doing exactly the same thing.
Start by typing ‘popular’ keywords into the Facebook search and click on videos.
Main keywords used in video ads include:
Get yours now
Buy it here
The list goes on, but as you can see from the below image, all video ads posted on Facebook related to that keyword.
Save ‘good’ video ads to your video library. This will tell Facebook you like dropshipping products and they’re algorithm will send you more to your feed.
Once you’ve saved a few videos, use Facebook’s Ad library to research the brand a little.
The Ad library allows you to spy on your competition, see which ads they are running and how long they’ve been running them.
Like our Facebook search, we can find potential products from a quick free Google search.
The trick here is to search for a niche and add myshopify.com at the end.
Niche + “myshopify.com”
Chances are our competitors set up their ecommerce store with Shopify.
So we can spy on products related to pets for example and narrow the search for websites run by Shopify.
I love searching for new products on Aliexpress because if any platform is going to tell us what’s selling it’s this one!
Type your niche in the search bar and filter results by “orders”.
The most popular items are listed at the top.
When you click on the item you will be able to check the company name, review rating, number of orders.
By clicking on orders you’ll also be able to see whether or not this product is heavily drop shipped.
You can also use this special link to be taken to the Dropshipping center which allows you to search for products that are selling well.
It’ll tell you what the product is, how many they’ve sold and the rating.
This is Golden!
Of Course no one knows better what is selling than Aliexpress!
2. Product Selection
The selection of your product is probably one of (if not) the most important part of the dropshipping process.
There is no way to guarantee your product will sell $1000 a day, however there are some key points for successful product research in 2020:
Only test new(ish) products – If you see a product that’s doing well, you need to check roughly when it was released.
Chances are if it’s got high engagement but it was released over a year ago, that particular brand has power of this market.
What you can do is track this brand and keep up to date with new products they are releasing.
If they are still running ads after a few weeks of releasing the product, it could be a winner.
Need to solve a problem for the end user – You can sell impulse products as they do make money, but you have a better chance selling a product that solves a problem.
For example, a lot of people; old/young/male/female, suffer with back problems, so you would probably do well with a product that promotes a solution to this.
Good (enough) profit margin – to cover the cost of advertising you need to be getting a decent enough margin.
Make sure to work this out beforehand, a 2-4 times mark up usually covers all basis.
Can’t find it in local stores – If you start selling a product you’d be able to find in any local store, then the buyer has no reason to purchase from you.
This is why it’s important to look for new to the market types of product, something not a lot of people have seen before.
The main thing you should take into consideration when selecting a product is identifying an audience that would find the products more valuable than the price your selling it for.
3. Setting up your Ecommerce site
When picking a product, consider the image and video content you are able to find.
You don’t want to rip off another brands content.
The best option is to order a sample product and film your own content (make sure you add a watermark when advertising).
Have a look at the Aliexpress listing as many of them have decent high quality product images.
Once your store is off the ground you MUST create your own content with images and videos.
I edit my own videos and use Camtasia to do so.
This is by far the most user friendly & quickest way to edit videos.
I also use Adobe Premiere Pro for all the jobs Camtasia can’t handle. The video editing possibilities are endless with Adobe Premiere Pro.
Create your store
Setting up your store’s website couldn’t be easier with Shopify.
It’s the way I started and have continued to use them throughout my dropshipping journey.
I have a step by step guide here.
Head over to shopify and sign up using their FREE 14 day trial link (click here).
You will need to purchase a domain.
I got mine from 123REG as they were offering the best deal at the time.
Shopify integrates with Oberlo to make the process of fulfilling orders extremely easy.
When you get an order on your Shopify store, you process the order through Oberlo, they fill in all of the details for you.
It literally takes a third of the time it would if you processed the order manually.
If you have a little money to start with and would prefer a done for you store where you can start selling straight away, check out Auto Ecom Empire.
Auto Ecom Empire is a unique eCommerce platform upon which we will set up your very own eCommerce store and brand.
In this business, you either trade your time or money.
If you don’t have the money, that spend time creating the store. If you have a little money, save time by investing in legitimate done for you systems like this one.
Check out Auto Ecom Empire >>
4. Picking your dropshipping supplier
When selecting a supplier for your product from Aliexpress, make sure you consider the below criteria:
- Ratings: Generally 4.8 out of 5 stars or more is what you want to look for. Any lower than that and you could gambling with your customer have a good or bad experience with the product. The closer to 5 stars the less likely it is you’ll have any issues.
Customer service & communication: Even though you are dropshipping great communication with the dropshipper is essential. If you ever have an issue, you want to be able to communicate effectively with them. Message the supplier and ask them questions about the product(s), see how long they take to respond and how effective they are at communicating.
Shipping times: I always look for Dropshippers with a 24-48 hour processing window. Any longer than that and generally you customers will be waiting a long time. ALWAYS ship via ePacket, this is tracked reliable and much faster shipping method. Trust me.
Top 2020 tip
Customers within the USA and UK do not enjoy waiting 2-3 weeks for their products anymore.
The way to secure more customers for your dropshipping store is to be able to offer 4-7 day shipping within USA and UK.
Look for a dropshipping supplier that can offer this type of service.
Popular and trusted sites include:
The great thing about services like Salehoo is that they cut the middle man out and find you suppliers who offer 2-5 day shipping.
This type of service is ideal and what your customers will be expecting.
You need to have the mindset of eventually evolving out of the Aliexpress dropshipping model.
Once you know your product is selling, your goal should be to improve the quality of the items and buy in Bulk, similar to the Amazon FBA online business model.
With this in mind, start to look for a supplier who can answer the below questions effectively:
Are they able to customize and brand products?
Do the products come with a warranty?
Do you have a faulty products return policy?
Can you ship orders to the customer directly?
What are your times of operation?
5. Marketing your store
Remember that $500 budget? Facebook/Instagram/Google is where your going to use most, if not all of it.
Facebook ads are expensive and getting more so, however they probably provide you with the best reach of any platform out there.
Facebook make it relatively easy to create a business page and start running ads from it.
You need to set up an ad account.
Google ads are less expensive and still highly effective.
However, they do not reach as many people as Facebook.
Finding Influencers for a product is also a great way to promote your store.
Sourcing a ‘legit’ influencer with a substantial amount of reach (not too much, under 200,000 followers is good to start), couldn’t be easier with tools such as Influencer Marketing Hub.
An ad is often referred to as a creative; this could be an image, video, banner etc.
I’m just going to come out and say it, the best form of ad creative to get a good amount of traffic flowing to your site in 2019/20 is a video ad.
This type of ‘creative’ gets people’s attention but you need to show them enough in the 10-20 secs your ad is running to spark their interest, otherwise they’ll keep scrolling.
Wrapping things up..
There you have it. I’ve given you a small overview into the potential of Dropshipping in 2020.
The old business model for Dropshipping simply will not work, you need to be able to evolve and follow the right steps to be successful in this business.
Things to remember
The Profit you make in the initial stages should always be poured back into scaling your store.
Do not pick a product or niche based on what you ‘think’ might sell. Always do proper research and analyse the data before continuing with a product.
Start your store using suppliers from Aliexpress if you need to but quickly move on to finding sourcing agents who will not only offer better communication but provide faster shipping times and better prices for your customers.
Do not rush your store and miss essential information. Make sure your customers have access to the shipping info, FAQ’s, contact us page etc. Follow the full Shopify guide, to make sure these are all done correctly.
Don’t just throw money into Facebook/Google/Instagram. Create an effective advertising strategy and take time to learn about how to use the data.
If you’re ready to start your very first dropshipping store with Shopify, click here for my FREE step by step guide!
Good Luck! Let me know how you get on.
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